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United Rentals, Inc. (URI) Still Too Cheap to Sell; Caterpillar Inc. (CAT) Can go to The Dogs Instead

Even if fears start to take hold about the construction business,  United Rentals, Inc. (NYSE:URI) is not the stock to be sold and Caterpillar Inc. (NYSE:CAT) is a better selling pick. On CNBC‘s Mad Dash, Jim Cramer revealed how investor’s planning to sell United Rentals, Inc. (NYSE:URI) might be losing a lot of value.

United Rentals, Inc. (NYSE:URI)

These apprehensions about the construction business’ down trend are a direct consequence of the lowering of profit outlook for the current fiscal year by the construction equipment manufacturer, Terex Corporation (NYSE:TEX).

Cramer warned about falling into this pitfall, since United Rentals, Inc. (NYSE:URI) has a different business model since the company is involved  in both residential and non-residential construction unlike Terex Corporation (NYSE:TEX). On top of this Jeffries, the investment banking firm raised its price target for United Rentals to $138 from $125.

“[…] United Rentals, Inc. (NYSE:URI) is a business that has just been fantastic, why? Residential and non-residential construction, so we have a situation where I think people are going to sell United Rentals, Inc. (NYSE:URI) on the addition of the S&P 500 (INDEXSP:.INX) because of Terex Corporation (NYSE:TEX) […],” said Cramer.

Instead, Cramer formulated  a hierarchy for investors according which Caterpillar Inc. (NYSE:CAT) should be sold before United Rentals, Inc. (NYSE:URI). The Illinois based  heavy equipment manufacturer,  Caterpillar Inc. (NYSE:CAT), has a very big mining division according to Cramer.

Mining has been a weak industry as of late and countries like Caterpillar Inc. (NYSE:CAT) have bore the brunt. Cramer explains that as imports from China haven’t been as significant as they used to be owing to slowing down of the economy, mining industry is facing lack of demand.

Hence comparing the certain slowdown of the mining industry to an uncertainty in the slowdown of the construction sector, especially both residential and non residential, Cramers’ vote of expulsion goes to Caterpillar Inc. (NYSE:CAT).


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